Burnap v. Robertson

1 Ga. L. Rep. 197

• Court: Supreme Court of Georgia
• Decided: July 1, 1885
• Status: Published

Opinion

Blandford, J.

If the maker of a note induced the payee to extend the time of payment and receive a mortgage to secure the claim by fraudently representing that a prior mortgage on the property had been discharged, upon the discovery of such fraud the creditor could have rescinded the agreement and returned the mortgage; but if he failed so to do, and instead retained the mortgage and waited until the maker’s property had been sold under the prior liens thereon, this would operate to discharge a surety or accomodation indorser, and the creditor could not recover from such surety or indorser, on the ground that the agreement with the principal was induced by fraud and was without consideration.

Judgment affirmed.